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This article first appeared on GuruFocus.
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Net Income: $543 million for the year ended December 31, 2025, up from $480 million in 2024, a 13.2% increase.
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Net Income per Diluted Share: $5.72 for the year ended December 31, 2025, compared to $5.05 in 2024, a 13.3% increase.
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Quarterly Net Income: $139.9 million for Q4 2025, up from $130 million in Q4 2024, a 7.6% increase.
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Return on Average Assets: 1.49% for the three months ending December 31, 2025.
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Return on Average Tangible Common Equity: 13.61% for the three months ending December 31, 2025.
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Efficiency Ratio: 43.6% for Q4 2025.
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Net Interest Margin: 3.3% for Q4 2025, up from 3.05% in Q4 2024.
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Stock Repurchase: $157 million or 2.34 million shares repurchased in 2025 at an average price of $67.04.
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Loans: $20.5 billion at December 31, 2025, down from $20.7 billion at September 30, 2025.
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Deposits: $28.4 billion at December 31, 2025, up from $27.7 billion at September 30, 2025.
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Non-Performing Assets: $150 million at December 31, 2025, up from $119 million at September 30, 2025.
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Allowance for Credit Losses: $333 million on loans and $371 million on loans and off-balance sheet exposure as of December 31, 2025.
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Net Interest Income: $275 million for Q4 2025, up from $267.8 million in Q4 2024.
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Non-Interest Income: $42.8 million for Q4 2025, up from $39.8 million in Q4 2024.
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Non-Interest Expense: $138.7 million for Q4 2025, down from $141.5 million in Q4 2024.
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Net Charge-Offs: $5.884 million for Q4 2025.
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Average Monthly New Loan Production: $314 million for Q4 2025.
Release Date: January 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Prosperity Bancshares Inc (NYSE:PB) reported a net income of $543 million for the year ended December 31, 2025, an increase of 13.2% compared to 2024.
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The net interest margin on a tax equivalent basis increased to 3.3% for the three months ending December 31, 2025, compared to 3.05% for the same period in 2024.
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Deposits increased by $700 million to $28.4 billion at December 31, 2025, exceeding expectations.
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The company completed a merger with American Bank and received approvals for a merger with Southwest Bankshares, enhancing its Texas footprint.
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Prosperity Bancshares Inc (NYSE:PB) repurchased approximately $157 million worth of its common stock under its 2025 stock repurchase program.
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Loans, excluding warehouse purchase program loans, decreased by $249 million from September 30, 2025, to December 31, 2025.
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Non-performing assets increased to $150 million at December 31, 2025, from $119 million at September 30, 2025.
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The allowance for credit losses on loans remained unchanged during the quarter ended December 31, 2025.
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The company faces challenges in competing with out-of-state competitors on larger loan deals.
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There are expected one-time merger-related charges of $30 to $33 million for the acquisitions of American Bank and Texas Partners Bank.
Q: Can you explain the difference in earnings estimates for Stellar Bancorp compared to consensus? A: David Zalman, CEO, explained that the difference is influenced by Stellar’s strong momentum in the latter half of 2025, which is expected to continue into 2026. Stellar’s earnings run rate is projected at $2.20 per share, supported by increased interest-earning assets and benefits from recent Fed rate cuts.
Q: How does the Stellar acquisition impact Prosperity’s growth strategy for 2026? A: David Zalman, CEO, stated that the focus will be on integrating the three banks acquired, including Stellar. He emphasized that Stellar is similar to Prosperity in terms of credit discipline, which should facilitate a smooth integration without the need for significant restructuring.
Q: What are the synergies and growth prospects from the Stellar acquisition, given the high acquisition price? A: David Zalman, CEO, highlighted that Stellar is a premium bank, justifying the acquisition price. The combined entity is expected to earn $7.34 per share by 2027, enhancing franchise value and positioning Prosperity as a leading bank in Texas.
Q: How will Prosperity manage the integration of multiple bank acquisitions simultaneously? A: Asylbek Osmonov, CFO, explained that Prosperity has designated teams for integration, ensuring that core operations remain unaffected. The bank has experience with 40 previous transactions, and the integration process is well-planned and on schedule.
Q: What is the outlook for Prosperity’s net interest margin (NIM) and net interest income (NII) in 2026? A: Asylbek Osmonov, CFO, projected an improvement in Prosperity’s NIM to around 3.50% for 2026, driven by repricing of bonds and loans. The addition of Stellar is expected to further enhance the margin to about 4.2%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.